DOVER, Del., Nov. 9, 2017 /PRNewswire/ -- Chesapeake
Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today reported third quarter financial results. The
Company's net income for the quarter ended September 30, 2017 was $6.8 million, compared to
$4.4 million for the same quarter of 2016. Earnings per share ("EPS") for the quarter ended
September 30, 2017 were $0.42 per share, compared to $0.29 per
share for the same quarter of 2016. The increase in net income reflected margin growth across business units for both the
Regulated Energy and Unregulated Energy segments, as well as lower operating and maintenance expenses for the quarter.
For the nine months ended September 30, 2017, the Company reported net income of $32.0
million, or $1.96 per share. This represents a decrease of $789,000, or $0.18 per share, compared to the same period in 2016. Higher margins
from the Eight Flags Energy, LLC ("Eight Flags") combined heat and power ("CHP") plant, Peninsula Energy Services Company, Inc.
("PESCO"), and Aspire Energy of Ohio, LLC ("Aspire Energy"), new services and customer growth in
the natural gas transmission and distribution operations in Florida and on the Delmarva
Peninsula, and new rates for Eastern Shore Natural Gas Company ("Eastern Shore") offset the increase in higher expenses to
generate and support growth and the impact of warmer weather. An increase in outstanding shares as a result of the equity
issuance in September 2016 lowered earnings per share by approximately $0.12 per share for the nine months ended September 30, 2017.
"Our solid results for the third quarter reflect the diverse sources of new gross margin throughout our Company," stated
Michael P. McMasters, President and Chief Executive Officer. "Recently completed growth
projects are adding value for our stockholders. In the near term, we will commence construction of Eastern Shore's largest ever
expansion project, expected to be completed in early 2018, as well other projects that will cultivate future growth," he
added. "Investments in system expansion, acquisitions, new service offerings and unique projects like Eight Flags, enhance
the continued growth in customers and deliveries in our natural gas distribution and transmission businesses. Our employees
continue to excel in identifying new opportunities for growth, and profitably managing current growth. We are also
maintaining operating efficiency while providing safe, reliable service to our customers," he concluded.
A more detailed discussion and analysis of the Company's results for each segment is provided in the following pages.
Comparative Results for the Quarters Ended September 30, 2017 and 2016
Operating income for the third quarter increased by $4.1 million to $14.2
million, compared to the same period in 2016, driven by higher retail propane sales volumes and margins, implementation of
new rates for Eastern Shore (subject to refund), additional margin from the Gas Reliability Infrastructure Program ("GRIP"), and
continued growth from the Company's Delmarva and Florida natural gas distribution operations.
Gross margin increased by $4.6 million, or 8.2 percent, which was offset by an increase in other
operating expenses of $473,000, or 1.0 percent.
Regulated Energy Segment
Operating income for the Regulated Energy segment increased by $2.1 million, or 15.7 percent,
compared to the same period in 2016. Higher operating income resulted from increased gross margin of $1.5
million during the quarter, or 3.4 percent, and a decrease in other operating expenses of $519,000.
The significant components of the $1.5 million gross margin increase included:
- $1.0 million of incremental revenue from the implementation of new rates for Eastern Shore,
which were effective August 1, 2017.
- $406,000 generated from additional GRIP investments in the Florida natural gas distribution operations; and
- $566,000 increase from customer growth in the natural gas distribution businesses (excluding
service expansions) which was partially offset by a $219,000 decrease in interruptible margin
from Eastern Shore.
The significant factors contributing to the net decrease of $519,000 in other operating expenses
included:
- $1.6 million in lower outside services and facilities and maintenance costs, due primarily to
lower consulting and service contractor costs;
- $437,000 in lower benefits and employee-related costs in 2017 (since the Company is
self-insured for healthcare, benefits costs fluctuate depending upon claims filed);
- $1.4 million in higher depreciation, asset removal and property tax costs associated with
recent capital investments.
Unregulated Energy Segment
Operating income for the Unregulated Energy segment increased by $2.1 million, or 67.9 percent,
compared to the same period in 2016. Gross margin increased by $3.1 million, or 30.1 percent, which
was offset by an increase of $1.0 million, or 7.4 percent, in other operating expenses.
The significant components of the $3.1 million gross margin increase were as follows:
- $1.2 million of additional gross margin from increased sales volumes of propane to wholesale
and retail customers on the Delmarva Peninsula and in Florida as well as higher sales of
natural gas by Aspire Energy;
- $440,000 and $271,000 of additional gross margin from retail
and wholesale propane margins, respectively, due primarily to favorable supply management activities;
- $297,000 of additional gross margin from Eight Flags operations, which was fully on-line in
the third quarter of 2017;
- $291,000 of additional gross margin from Aspire Energy as a result of pricing amendments to
long-term sales agreements; and
- $233,000 in increased gross margin due to the absence of the loss for Xeron recorded in the
third quarter of 2016.
The principal components of the $1.0 million increase in other operating expenses were:
$730,000 in higher staffing and associated costs for additional personnel to support growth,
$293,000 in expenses associated with the incremental margin from Eight Flags, and $347,000 in higher depreciation, amortization and property tax costs due to increased capital investments and
amortization of intangible assets acquired through acquisitions in 2017.
Comparative Results for the Nine Months Ended September 30, 2017 and 2016
Operating income for the nine months ended September 30, 2017 increased by $303,000 to
$62.6 million, compared to $62.3 million for the same period in 2016.
Gross margin increased by $14.0 million, or 7.3 percent, net of the negative impact of weather,
which reduced margin by approximately $1.8 million for the first nine months. Other operating
expenses increased by $13.7 million, or 10.7 percent, due primarily to a $4.3 million increase in depreciation, amortization and property taxes and a $9.4
million increase in other operating expenses to support growth.
Regulated Energy Segment
Operating income for the Regulated Energy segment decreased by $745,000, or 1.4 percent,
compared to the same period in 2016, due principally to weather and the level and timing of costs associated with growth. Gross
margin increased by $5.7 million, despite the impact of weather, which reduced margin by
approximately $850,000 for the nine months ended September 30, 2017. The $3.5 million increase in depreciation, amortization and taxes and $3.0 million
increase in other operating expenses largely reflect costs associated with recently completed and planned growth projects. Of the
total $6.4 million increase in other operating expenses, $4.7 million
is associated with Eastern Shore's recently completed projects as well as initiatives that are currently underway.
The significant components of the $5.7 million gross margin increase included:
- $1.6 million generated by additional GRIP investments in the Florida natural gas distribution operations;
- $1.6 million from growth in natural gas distribution and transmission services (excluding
service expansions);
- $1.4 million generated from recently completed natural gas transmission expansions, which are
more fully discussed in the "Major Projects and Initiatives" section later in this press release;
- $1.0 million from the implementation of Eastern Shore's new rates, as discussed
previously;
- $534,000 from new natural gas transmission and distribution services provided to Eight Flags'
CHP plant; and
- $249,000 generated as a result of the rate case settlement by the Company's Delaware natural gas distribution operations.
The foregoing increases were offset by a decrease in gross margin of $1.2 million from lower
customer consumption of energy for the Company's distribution operations in Florida and on the
Delmarva Peninsula, due primarily to weather, particularly warmer weather during the first quarter.
The significant components of the $6.4 million increase in other operating expenses
included:
- $3.5 million in higher depreciation, asset removal and property tax costs associated with
recent capital investments;
- $1.6 million in higher payroll costs for additional personnel to support growth;
- $855,000 in increased regulatory expenses, due primarily to Eastern Shore's rate case;
and
- $722,000 in higher benefits and employee-related costs in 2017 (since the Company is
self-insured for healthcare, benefits costs fluctuate depending upon filed claims).
Unregulated Energy Segment
Operating income for the Unregulated Energy segment for the nine months ended September 30, 2017
was $10.5 million, an increase of $1.2 million, or 13.3 percent,
compared to the same period in 2016. Gross margin increased by $8.4 million, or 18.6 percent, which
was offset by an increase of $7.2 million, or 20.0 percent, in operating expenses for the nine
months ended September 30, 2017.
The significant components of the $8.4 million gross margin increase were as follows:
- $4.2 million of additional gross margin from Eight Flags' CHP plant, which commenced
operations in June 2016;
- $1.8 million from PESCO, due to an increase in the number of contracts and customers served
as well as additional revenue in the first quarter from providing natural gas to a customer in Ohio under a supplier agreement, which expired on March 31, 2017;
- $1.1 million of additional gross margin from Aspire Energy as a result of pricing amendments
to long-term gas sales agreements;
- $728,000 of additional gross margin from wholesale propane sales, due primarily to favorable
supply management activities; and
- $168,000 of additional gross margin, due primarily to higher sales of propane in Florida, a portion of which was associated with the timing of deliveries due partially to weather
conditions in the third quarter of 2017, offset by the impact of warmer weather during the first six months of 2017.
The significant components of the $7.2 million increase in other operating expenses
included:
- $2.8 million in higher operating expenses by Eight Flags' CHP plant in support of the margin
generated;
- $1.5 million in higher payroll costs for additional personnel to support growth;
- $950,000 in higher benefits and employee-related costs in 2017 (since the Company is
self-insured for healthcare, benefits costs fluctuate depending upon claims filed);
- $800,000 in higher depreciation expense, of which $424,000
relates to a credit adjustment in 2016 recorded in conjunction with the final valuation for Aspire Energy; and
- $350,000 in higher outside services costs associated primarily with growth and ongoing
compliance activities.
The Company also incurred $367,000 in non-operating expenses to complete the wind-down of
Xeron's operations.
Matters discussed in this release may include forward-looking statements that involve risks and uncertainties. Actual
results may differ materially from those in the forward-looking statements. Please refer to the Safe Harbor for Forward-Looking
Statements in the Company's 2016 Annual Report on Form 10-K for further information on the risks and uncertainties related to the
Company's forward-looking statements.
The discussions of the results use the term "gross margin," a non-Generally Accepted Accounting Principles ("GAAP")
financial measure, which management uses to evaluate the performance of the Company's business segments. For an explanation of
the calculation of "gross margin," see the footnote to the Financial Summary.
Unless otherwise noted, earnings per share are presented on a diluted basis.
Conference Call
Chesapeake Utilities will host a conference call on Friday, November 10, 2017, at 10:30 a.m.
Eastern Time to discuss the Company's financial results for the quarter and nine months ended September 30, 2017. To
participate in this call, dial 855.801.6270 and reference Chesapeake Utilities' 2017 Third Quarter Financial Results Conference
Call. To access the replay recording of this call, please visit the Company's website at http://investor.chpk.com/results.cfm or download the replay on
your mobile device by accessing the Audio cast section of the Company's IR App.
About Chesapeake Utilities Corporation
Chesapeake Utilities is a diversified energy company engaged in natural gas distribution, transmission, gathering and
processing, and marketing; electricity generation and distribution; propane gas distribution; and other businesses. Information
about Chesapeake Utilities and its family of businesses is available at http://www.chpk.com or through its IR App.
Please note that Chesapeake Utilities Corporation is not affiliated with Chesapeake Energy, an oil and natural gas
exploration company headquartered in Oklahoma City, Oklahoma.
For more information, contact:
Beth W. Cooper
Senior Vice President & Chief Financial Officer
302.734.6799
Financial Summary
(in thousands, except per share data)
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September 30,
|
|
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Gross Margin (1)
|
|
|
|
|
|
|
|
Regulated Energy segment
|
$
|
46,909
|
|
|
$
|
45,375
|
|
|
$
|
151,147
|
|
|
$
|
145,446
|
|
Unregulated Energy segment
|
13,272
|
|
|
10,202
|
|
|
53,827
|
|
|
45,380
|
|
Other businesses and eliminations
|
(105)
|
|
|
(57)
|
|
|
(325)
|
|
|
(166)
|
|
Total Gross Margin
|
$
|
60,076
|
|
|
$
|
55,520
|
|
|
$
|
204,649
|
|
|
$
|
190,660
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
Regulated Energy segment
|
$
|
15,168
|
|
|
$
|
13,115
|
|
|
$
|
51,915
|
|
|
$
|
52,660
|
|
Unregulated Energy segment
|
(989)
|
|
|
(3,080)
|
|
|
10,504
|
|
|
9,267
|
|
Other businesses and eliminations
|
60
|
|
|
121
|
|
|
161
|
|
|
350
|
|
Total Operating Income
|
14,239
|
|
|
10,156
|
|
|
62,580
|
|
|
62,277
|
|
|
|
|
|
|
|
|
|
Other Income (Expense), net
|
239
|
|
|
(28)
|
|
|
(643)
|
|
|
(68)
|
|
Interest Charges
|
3,321
|
|
|
2,722
|
|
|
9,133
|
|
|
7,996
|
|
Pre-tax Income
|
11,157
|
|
|
7,406
|
|
|
52,804
|
|
|
54,213
|
|
Income Taxes
|
4,324
|
|
|
2,990
|
|
|
20,781
|
|
|
21,401
|
|
Net Income
|
$
|
6,833
|
|
|
$
|
4,416
|
|
|
$
|
32,023
|
|
|
$
|
32,812
|
|
|
|
|
|
|
|
|
|
Earnings Per Share of Common Stock
|
|
|
|
|
|
|
|
Basic
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
1.96
|
|
|
$
|
2.14
|
|
Diluted
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
1.96
|
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) "Gross margin" is determined by deducting the cost
of sales from operating revenue. Cost of sales includes the purchased fuel cost for natural gas, electricity and propane
and the cost of labor spent on direct revenue-producing activities and excludes depreciation, amortization and accretion.
Gross margin should not be considered an alternative to operating income or net income, which are determined in
accordance with GAAP. The Company believes that gross margin, although a non-GAAP measure, is useful and meaningful to
investors as a basis for making investment decisions. It provides investors with information that demonstrates the
profitability achieved by the Company under its allowed rates for regulated operations and under its competitive pricing
structure for non-regulated segments. The Company's management uses gross margin in measuring its business units'
performance. Other companies may calculate gross margin in a different manner.
|
Financial Summary Highlights
Key variances, between the three months ended September 30, 2016 and 2017,
included:
|
|
|
|
|
|
|
|
(in thousands, except per share data)
|
|
Pre-tax
Income
|
|
Net
Income
|
|
Earnings
Per Share
|
Third Quarter of 2016 Reported Results
|
|
$
|
7,406
|
|
|
$
|
4,416
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
Adjusting for unusual items:
|
|
|
|
|
|
|
Absence of Xeron's third quarter 2016 loss
|
|
545
|
|
|
334
|
|
|
0.02
|
|
Weather impact
|
|
(333)
|
|
|
(204)
|
|
|
(0.01)
|
|
|
|
212
|
|
|
130
|
|
|
0.01
|
|
Increased Gross Margins:
|
|
|
|
|
|
|
Customer consumption (non-weather)
|
|
1,166
|
|
|
714
|
|
|
0.05
|
|
Implementation of new rates for Eastern Shore*
|
|
1,020
|
|
|
625
|
|
|
0.04
|
|
Retail propane margins
|
|
440
|
|
|
270
|
|
|
0.02
|
|
GRIP*
|
|
406
|
|
|
249
|
|
|
0.02
|
|
Natural gas growth (excluding service expansions)
|
|
347
|
|
|
213
|
|
|
0.01
|
|
Eight Flags' CHP plant
|
|
304
|
|
|
186
|
|
|
0.01
|
|
Pricing amendments to Aspire Energy's long-term agreements
|
|
291
|
|
|
178
|
|
|
0.01
|
|
Higher wholesale propane volumes and margins
|
|
271
|
|
|
166
|
|
|
0.01
|
|
|
|
4,245
|
|
|
2,601
|
|
|
0.17
|
|
Decreased (Increased) Other Operating Expenses:
|
|
|
|
|
|
|
Higher depreciation, asset removal and property tax costs due to new
capital
investments
|
|
(1,710)
|
|
|
(1,047)
|
|
|
(0.07)
|
|
Lower outside services and facilities maintenance costs
|
|
1,678
|
|
|
1,028
|
|
|
0.07
|
|
Higher payroll expense
|
|
(913)
|
|
|
(559)
|
|
|
(0.04)
|
|
Lower benefit and other employee-related expenses
|
|
295
|
|
|
181
|
|
|
0.01
|
|
Eight Flags' operating expenses
|
|
293
|
|
|
179
|
|
|
0.01
|
|
|
|
(357)
|
|
|
(218)
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
Net other changes
|
|
(349)
|
|
|
(96)
|
|
|
(0.01)
|
|
|
|
(349)
|
|
|
(96)
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
EPS impact of increase in outstanding shares due to September 2016
offering
|
|
—
|
|
|
—
|
|
|
(0.02)
|
|
Third Quarter of 2017 Reported Results
|
|
$
|
11,157
|
|
|
$
|
6,833
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See the Major Projects and Initiatives
table later in this press release.
|
Key variances, between the nine months ended September 30, 2016 and 2017, included:
|
|
|
|
|
|
|
(in thousands, except per share data)
|
|
Pre-tax
Income
|
|
Net
Income
|
|
Earnings
Per Share
|
Nine Months Ended September 30, 2016 Reported Results
|
|
$
|
54,213
|
|
|
$
|
32,812
|
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
Adjusting for unusual items:
|
|
|
|
|
|
|
Weather impact
|
|
(1,782)
|
|
|
(1,081)
|
|
|
(0.07)
|
|
Wind-down and absence of loss from Xeron operations
|
|
(341)
|
|
|
(207)
|
|
|
(0.01)
|
|
|
|
(2,123)
|
|
|
(1,288)
|
|
|
(0.08)
|
|
Increased Gross Margins:
|
|
|
|
|
|
|
Eight Flags' CHP plant
|
|
4,721
|
|
|
2,863
|
|
|
0.19
|
|
Natural gas marketing
|
|
1,760
|
|
|
1,067
|
|
|
0.07
|
|
GRIP*
|
|
1,619
|
|
|
982
|
|
|
0.06
|
|
Natural gas growth (excluding service expansions)
|
|
1,574
|
|
|
955
|
|
|
0.06
|
|
Service expansions*
|
|
1,371
|
|
|
831
|
|
|
0.05
|
|
Pricing amendments to Aspire Energy's long-term agreements
|
|
1,143
|
|
|
693
|
|
|
0.04
|
|
Implementation of new rates for Eastern Shore*
|
|
1,020
|
|
|
619
|
|
|
0.04
|
|
Wholesale propane margins
|
|
728
|
|
|
441
|
|
|
0.03
|
|
Customer consumption (non-weather)
|
|
700
|
|
|
425
|
|
|
0.03
|
|
Implementation of Delaware Division settled rates
|
|
249
|
|
|
151
|
|
|
0.01
|
|
|
|
14,885
|
|
|
9,027
|
|
|
0.58
|
|
Increased Other Operating Expenses:
|
|
|
|
|
|
|
Higher depreciation, asset removal and property tax costs due to new
capital
investments
|
|
(4,251)
|
|
|
(2,578)
|
|
|
(0.17)
|
|
Higher payroll expense
|
|
(3,074)
|
|
|
(1,864)
|
|
|
(0.12)
|
|
Eight Flags' operating expenses
|
|
(2,821)
|
|
|
(1,711)
|
|
|
(0.11)
|
|
Higher benefit and other employee-related expenses
|
|
(1,669)
|
|
|
(1,012)
|
|
|
(0.07)
|
|
Higher regulatory expenses associated with rate filings
|
|
(855)
|
|
|
(519)
|
|
|
(0.03)
|
|
Higher outside services and facilities maintenance costs
|
|
(318)
|
|
|
(193)
|
|
|
(0.01)
|
|
|
|
(12,988)
|
|
|
(7,877)
|
|
|
(0.51)
|
|
|
|
|
|
|
|
|
Interest charges
|
|
(1,136)
|
|
|
(689)
|
|
|
(0.04)
|
|
Net other changes
|
|
(47)
|
|
|
38
|
|
|
(0.01)
|
|
|
|
(1,183)
|
|
|
(651)
|
|
|
(0.05)
|
|
|
|
|
|
|
|
|
EPS impact of increase in outstanding shares due to September 2016
offering
|
|
—
|
|
|
—
|
|
|
(0.12)
|
|
Nine Months Ended September 30, 2017 Reported Results
|
|
$
|
52,804
|
|
|
$
|
32,023
|
|
|
$
|
1.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See the Major Projects and Initiatives
table later in this press release.
|
|
Major Projects and Initiatives
The following table summarizes gross margin for the Company's major projects and initiatives recently completed and
initiatives currently underway, but which will be completed in the future. Gross margin reflects operating revenue less cost of
sales, excluding depreciation, amortization and accretion (dollars in thousands):
|
Gross Margin for the Period
|
|
Three Months Ended
|
Nine Months Ended
|
Year Ended
|
|
|
|
|
|
|
September 30,
|
September 30,
|
December 31,
|
Estimate for
|
|
2017
|
|
2016
|
|
Variance
|
2017
|
|
2016
|
|
Variance
|
2016
|
2017
|
|
2018
|
|
2019
|
Major Projects and Initiatives
Recently Completed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Investment Projects
|
$
|
9,807
|
|
$
|
8,963
|
|
$
|
844
|
$
|
29,533
|
|
$
|
21,822
|
|
$
|
7,711
|
$
|
29,819
|
$
|
35,346
|
|
$
|
31,814
|
|
$
|
32,724
|
Eastern Shore Rate Case (1)
|
1,020
|
|
—
|
|
1,020
|
1,020
|
|
—
|
|
1,020
|
—
|
TBD
|
|
TBD
|
|
TBD
|
Settled Delaware Division Rate Case
|
431
|
|
469
|
|
(38)
|
1,596
|
|
1,347
|
|
249
|
1,487
|
2,250
|
|
2,250
|
|
2,250
|
Total Major Projects and Initiatives Recently Completed
|
11,258
|
|
9,432
|
|
1,826
|
32,149
|
|
23,169
|
|
8,980
|
31,306
|
37,596
|
|
34,064
|
|
34,974
|
Future Major Projects and Initiatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Investment Projects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Eastern Shore System Expansion
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
126
|
|
9,313
|
|
15,799
|
Northwest Florida Expansion
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
—
|
|
3,484
|
|
5,127
|
Other Florida Pipeline Expansions
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
—
|
|
2,044
|
|
2,542
|
Total Future Major Projects and Initiatives
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
126
|
|
14,841
|
|
23,468
|
Total
|
$
|
11,258
|
|
$
|
9,432
|
|
$
|
1,826
|
$
|
32,149
|
|
$
|
23,169
|
|
$
|
8,980
|
$
|
31,306
|
$
|
37,722
|
|
$
|
48,905
|
|
$
|
58,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In January 2017, Eastern Shore filed a rate case with the
FERC to recover the costs of the 2016 System Reliability Project and other investments and expenses
associated with the expansion, reliability and safety initiatives completed by ESNG since its last rate settlement in
2012. Settlement discussions among Eastern Shore,
intervenors and the FERC Staff are ongoing and future margin contributions will be provided once a settlement is
finalized. For the third quarter of 2017, a portion of the
increase in rates, implemented subject to refund in August 2017, has been recorded as revenue and the remainder has been
reserved pending the settlement.
|
Major Projects and Initiatives Recently Completed
The following table summarizes gross margin generated from the Company's major projects and initiatives recently completed
(dollars in thousands):
|
Gross Margin for the Period
|
|
Three Months Ended
|
Nine Months Ended
|
Year Ended
|
|
|
|
|
|
|
|
September 30,
|
September 30,
|
December 31,
|
|
Estimate for
|
|
2017
|
|
2016
|
|
Variance
|
2017
|
|
2016
|
|
Variance
|
2016
|
|
2017
|
|
2018
|
|
2019
|
Capital Investment Projects:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Expansions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term contracts (Delaware)
|
$
|
1,283
|
|
$
|
3,080
|
|
$
|
(1,797)
|
|
$
|
5,140
|
|
$
|
8,271
|
|
$
|
(3,131)
|
$
|
11,454
|
|
$
|
5,642
|
|
$
|
1,096
|
|
$
|
1,096
|
Long-term contracts (Delaware)
|
2,793
|
|
862
|
|
1,931
|
|
7,089
|
|
2,587
|
|
4,502
|
1,815
|
|
7,611
|
|
7,605
|
|
7,583
|
Total Service Expansions
|
4,076
|
|
3,942
|
|
134
|
|
12,229
|
|
10,858
|
|
1,371
|
13,269
|
|
13,253
|
|
8,701
|
|
8,679
|
Florida GRIP
|
3,393
|
|
2,987
|
|
406
|
|
10,002
|
|
8,383
|
|
1,619
|
11,552
|
|
13,727
|
|
14,407
|
|
15,085
|
Eight Flags' CHP Plant
|
2,338
|
|
2,034
|
|
304
|
|
7,302
|
|
2,581
|
|
4,721
|
4,998
|
|
8,366
|
|
8,706
|
|
8,960
|
Total Capital Investment Projects
|
9,807
|
|
8,963
|
|
844
|
|
29,533
|
|
21,822
|
|
7,711
|
29,819
|
|
35,346
|
|
31,814
|
|
32,724
|
Eastern Shore Rate Case (1)
|
1,020
|
|
—
|
|
1,020
|
|
1,020
|
|
—
|
|
1,020
|
—
|
|
TBD
|
|
TBD
|
|
TBD
|
Settled Delaware Division Rate Case
|
431
|
|
469
|
|
(38)
|
|
1,596
|
|
1,347
|
|
249
|
1,487
|
|
2,250
|
|
2,250
|
|
2,250
|
Total Major Projects and Initiatives Recently Completed
|
$
|
11,258
|
|
$
|
9,432
|
|
$
|
1,826
|
|
$
|
32,149
|
|
$
|
23,169
|
|
$
|
8,980
|
$
|
31,306
|
|
$
|
37,596
|
|
$
|
34,064
|
|
$
|
34,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In January 2017, Eastern Shore filed a rate case
with the FERC to recover the costs of the 2016 System Reliability Project and other investments and expenses associated
with the expansion, reliability and safety initiatives completed by ESNG since its last rate settlement in 2012.
Settlement discussions among Eastern Shore, intervenors and the FERC Staff are ongoing and future margin contributions
will be provided once a settlement is finalized. For the third quarter of 2017, a portion of the increase in rates,
implemented subject to refund in August 2017, has been recorded as revenue and the remainder has been reserved pending
the settlement.
|
Service Expansions
In August 2014, Eastern Shore entered into a precedent agreement with an electric power
generator in Kent County, Delaware, to provide a 20-year OPT 90≤ natural gas transmission
service for 45,000 dekatherms per day ("Dts/d") deliverable to the lateral serving the customer's facility. In July 2016, the FERC authorized Eastern Shore to construct and operate the project, which consists of 5.4 miles
of 16-inch pipeline looping and new compression capability in Delaware. Eastern Shore provided
interim services to this customer pending construction of facilities. Construction of the project was completed, and long-term
service commenced in March 2017. This service generated an additional gross margin of $106,000 during the nine months ended September 30, 2017 compared to the same period in 2016. There was no
incremental margin change during the third quarter as the margin generated from the permanent services equated to the margin
generated from providing interim services during the third quarter of 2016. This service is expected to generate gross margin of
$7.0 million for 2017 and between $5.8 million and $7.8 million
annually through the remaining term of the agreement.
In October 2015, Eastern Shore submitted an application to the FERC to make certain meter tube
and control valve replacements and related improvements at its Texas Eastern Transmission, LP ("TETLP") interconnect facilities
to increase natural gas receipts from TETLP by 53,000 Dts/d, for a total capacity of 160,000 Dts/d. In December 2015, the FERC authorized Eastern Shore to proceed with this project, which was completed and placed
in service in March 2016. Approximately 35 percent of the increased capacity has been subscribed on
a short-term firm service basis through October 2017. This service generated an additional gross
margin of $80,000 and $1.3 million for the three and nine months
ended September 30, 2017, respectively, compared to the same periods in 2016. The remaining capacity is available for firm
or interruptible service.
System Reliability Project: In July 2016, the FERC authorized Eastern Shore to construct
and operate the proposed System Reliability Project, which consisted of approximately 10.1 miles of 16-inch pipeline looping and
auxiliary facilities in New Castle and Kent Counties,
Delaware, and a new compressor at its existing Bridgeville
compressor station in Sussex County, Delaware. A 2.5 mile looping segment was completed and
placed into service in December 2016. The remaining looping and the new compressor were completed
and placed into service in the second quarter of 2017. This project was included in Eastern Shore's January 2017 base rate case filing with the FERC. The Company has assumed recovery of this project's costs in
August 2017, coinciding with the proposed effectiveness of new rates, subject to refund pending
final resolution of the base rate case.
GRIP
GRIP is a natural gas pipe replacement program approved by the Florida Public Service Commission ("PSC"), designed to expedite
the replacement of qualifying distribution mains and services (any material other than coated steel or plastic) to enhance the
reliability and integrity of the Company's Florida natural gas distribution systems. This
program allows recovery, through regulated rates, of capital and other program-related costs, inclusive of a return on
investment, associated with the replacement of the mains and services. Since the program's inception in August 2012, the Company has invested $110.5 million to replace 240 miles of
qualifying distribution mains, including $7.6 million during the first nine months of 2017. The
increased investment in GRIP generated additional gross margin of $406,000 and $1.6 million for the three and nine months ended September 30, 2017, respectively, compared to the same
periods in 2016.
Eight Flags' CHP plant
In June 2016, Eight Flags completed construction of a CHP plant on Amelia Island, Florida. This CHP plant, which consists of a natural-gas-fired
turbine and associated electric generator, produces approximately 20 megawatts of base load power and includes a heat recovery
steam generator capable of providing approximately 75,000 pounds per hour of residual steam. In June
2016, Eight Flags began selling power generated from the CHP plant to Florida Public Utilities Company ("FPU"), the
Company's wholly-owned subsidiary, pursuant to a 20-year power purchase agreement for distribution to FPU's retail electric
customers. In July 2016, it also started selling steam to the industrial customer that owns the
property on which Eight Flags' CHP plant is located, pursuant to a separate 20-year contract.
The CHP plant is powered by natural gas transported by FPU through its distribution system and by Peninsula Pipeline Company,
Inc. ("Peninsula Pipeline"), the Company's wholly-owned Florida intrastate pipeline subsidiary.
For the three and nine months ended September 30, 2017, Eight Flags and other affiliates of the Company generated
$304,000 and $4.7 million, respectively, in additional gross
margin as a result of these services that began in June 2016. This amount includes gross margin of
$7,000 and $534,000, for the three and nine months ended
September 30, 2017, respectively, attributable to natural gas distribution and transportation services provided to the
CHP plant by the Company's regulated affiliates.
Major Projects and Initiatives Currently Underway
Northwest Florida Expansion Project: Peninsula Pipeline and the Company's Florida natural gas division are constructing a pipeline in Escambia County,
Florida that will interconnect with the Florida Gas Transmission Company ("FGT") interstate pipeline. The project consists
of 33 miles of 12-inch transmission line from the FGT interconnect that will be operated by Peninsula Pipeline and 8 miles of
8-inch lateral distribution lines that will be operated by the Company's Florida natural gas
division. The Company has signed agreements to serve two large customers and is marketing to other customers close to the
facilities. The estimated annual gross margin associated with this project, once in service, is approximately $5.1 million.
New Smyrna Beach, Florida Project: Peninsula Pipeline is constructing a pipeline in
Volusia County, Florida that will interconnect with FGT's pipeline. The project consists of 14
miles of transmission line from the FGT interconnect that will be operated by Peninsula Pipeline. The Company entered into an
agreement to serve FPU customers. The estimated annual gross margin associated with this project, once in service, is
approximately $1.4 million.
2017 Expansion Project: In May 2016, Eastern Shore submitted a request to the FERC to
initiate the FERC's pre-filing process for its proposed 2017 Expansion Project. This project, which will expand Eastern Shore's
firm service capacity by 26 percent, will provide 61,162 Dts/d of additional firm natural gas transportation service on Eastern
Shore's pipeline system with an additional 52,500 Dts/d of firm transportation service at certain Eastern Shore receipt
facilities pursuant to precedent agreements Eastern Shore entered into with existing customers. We expect to invest approximately
$115.0 million in this expansion project and for the project to generate approximately $15.8 million of gross margin in the first full year after the new transportation services go into effect. On
October 4, 2017, FERC issued a Certificate of Public Convenience and Necessity authorizing Eastern
Shore to construct and operate the proposed 2017 Expansion Project.
Other major factors influencing gross margin
Weather and Consumption
Temperature variation in 2017 negatively impacted the Company's earnings. Compared to the prior year, cooler
temperatures in Florida during the third quarter of 2017, reduced gross margin by $333,000, and warmer temperatures in all of the Company's service territories during the first nine months of
2017, reduced gross margin by $1.8 million, respectively. Warmer than normal temperatures for the
quarter and nine months ended September 30, 2017, reduced gross margin by $193,000 and $4.3 million, respectively. The following table summarizes heating
degree-day ("HDD") and cooling degree-day ("CDD") variances from the 10-year average HDD/CDD ("Normal") for the three and nine
months ended September 30, 2017 and 2016.
HDD and CDD Information
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
|
September 30,
|
|
|
|
2017
|
|
2016
|
|
Variance
|
|
2017
|
|
2016
|
|
Variance
|
Delmarva
|
|
|
|
|
|
|
|
|
|
|
|
Actual HDD
|
16
|
|
|
11
|
|
|
5
|
|
|
2,262
|
|
|
2,590
|
|
|
(328)
|
|
10-Year Average HDD ("Delmarva Normal")
|
62
|
|
|
65
|
|
|
(3)
|
|
|
2,845
|
|
|
2,919
|
|
|
(74)
|
|
Variance from Delmarva Normal
|
(46)
|
|
|
(54)
|
|
|
|
|
(583)
|
|
|
(329)
|
|
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
Actual HDD
|
—
|
|
|
—
|
|
|
—
|
|
|
298
|
|
|
514
|
|
|
(216)
|
|
10-Year Average HDD ("Florida Normal")
|
—
|
|
|
—
|
|
|
—
|
|
|
602
|
|
|
553
|
|
|
49
|
|
Variance from Florida Normal
|
—
|
|
|
—
|
|
|
|
|
(304)
|
|
|
(39)
|
|
|
|
Ohio
|
|
|
|
|
|
|
|
|
|
|
|
Actual HDD
|
80
|
|
|
39
|
|
|
41
|
|
|
3,072
|
|
|
3,596
|
|
|
(524)
|
|
10-Year Average HDD ("Ohio Normal")
|
92
|
|
|
103
|
|
|
(11)
|
|
|
3,866
|
|
|
3,865
|
|
|
1
|
|
Variance from Ohio Normal
|
(12)
|
|
|
(64)
|
|
|
|
|
(794)
|
|
|
(269)
|
|
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
Actual CDD
|
1,526
|
|
|
1,679
|
|
|
(153)
|
|
|
2,606
|
|
|
2,792
|
|
|
(186)
|
|
10-Year Average CDD ("Florida CDD Normal")
|
1,542
|
|
|
1,523
|
|
|
19
|
|
|
2,579
|
|
|
2,548
|
|
|
31
|
|
Variance from Florida CDD Normal
|
(16)
|
|
|
156
|
|
|
|
|
27
|
|
|
244
|
|
|
|
Propane Operations
The Company's Florida and Delmarva propane distribution operations added $2.0 million and $1.4 million, in incremental margin for the three and nine
months ended September 30, 2017, respectively, compared to the same periods in 2016. Higher
volumes sold to retail customers and improved margins due to effective supply management activities generated $905,000 and $440,000, in incremental margin, for the three months ended
September 30, 2017, respectively, compared to the same period in 2016 and higher service revenue
added $187,000 in additional margin, during the quarter.
For the nine months ended September 2017, higher volumes sold to retail customers and improved
margins due to effective supply management activities generated $142,000 and $121,000, in incremental margin, respectively, compared to the same period in 2016 and higher service revenue
added $244,000, in additional margin during the period.
Wholesale propane margins increased, generating additional gross margin of $271,000 and
$728,000 for the three and nine months ended September 30, 2017,
respectively, due primarily to higher volumes sold and improved margins resulting from supply management activities.
PESCO
PESCO provides natural gas supply and supply management services to residential, commercial, industrial and wholesale
customers in Florida, on the Delmarva Peninsula, in Ohio, and,
as a result of the recent acquisition of certain operating assets of ARM Energy Management, LLC, in western Pennsylvania. PESCO competes with regulated utilities and other unregulated third-party marketers to sell
natural gas supplies directly to residential, commercial and industrial customers through competitively-priced contracts. PESCO
does not currently own or operate any natural gas transmission or distribution assets but sells gas that is delivered to retail,
commercial or wholesale customers through affiliated and non-affiliated local distribution company systems and transmission
pipelines. The Company's Delmarva natural gas distribution operations entered into asset management agreements with PESCO
to manage a portion of their natural gas pipeline and storage capacity for three years beginning on April
1, 2017.
For the three months ended September 30, 2017, PESCO's gross margin increased by $56,000. For the nine months ended September 30, 2017, PESCO generated
additional gross margin of $1.8 million compared to the same period in 2016, largely as a result of
revenues from a natural gas supplier agreement with a customer in Ohio which expired on
March 31, 2017, as well as additional customers in Florida,
partially offset by lower margin in the Mid-Atlantic region, primarily during the first quarter of 2017.
Xeron
As disclosed previously, Xeron's operations were wound down during the second quarter of 2017. As a result,
Xeron did not generate an operating loss during the third quarter of 2017 and will not report operating results during the fourth
quarter of 2017 or subsequent years. During the third quarter of 2016, Xeron generated a pre-tax loss of $486,000. On a year-to-date basis, Xeron's pre-tax operating loss increased by $375,000, compared to the same period in 2016, driven primarily by non-recurring employee severance costs and
costs associated with the termination of leased office space in Houston, Texas. The Company does
not anticipate incurring any additional costs that will have a material impact associated with winding down Xeron's
operations.
Other Natural Gas Growth - Distribution Operations
In addition to service expansions, the Company's natural gas distribution operations on the Delmarva Peninsula
generated $379,000 and $1.0 million in additional gross margin for
the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016, due to an increase
in residential, commercial and industrial customers served. The average number of residential customers on the Delmarva Peninsula
increased by 3.7 percent and 3.8 percent during the three and nine months ended September 30, 2017, respectively, compared
to the same periods in 2016. The Company's natural gas distribution operations in Florida
generated $187,000 and $1.2 million in additional gross margin for
the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016, due primarily to an
increase in commercial and industrial customers in Florida.
Regulatory Proceedings
Delaware Division Rate Case
In December 2016, the Delaware PSC approved a settlement agreement, which, among other
things, provided for an increase in the Company's Delaware division revenue requirement of
$2.25 million and a rate of return on common equity of 9.75 percent. The new authorized rates went
into effect on January 1, 2017. For the three months ended September 30,
2017, compared to the same period in 2016, revenue decreased by $38,000, reflecting the
variance between settled and interim rates. For the nine months ended September 30, 2017, compared
to the same period in 2016, the Company recorded incremental revenue of approximately $249,000
related to the rate case. Any amounts collected through 2016 interim rates in excess of the respective portion of the
$2.25 million were refunded to the ratepayers in March 2017.
Eastern Shore Rate Case
In January 2017, Eastern Shore filed a base rate proceeding with the FERC, as required by the
terms of its 2012 rate case settlement agreement. Eastern Shore's proposed rates were based on a cost of service of approximately
$60 million, resulting in an overall requested revenue increase of approximately $18.9 million and a requested rate of return on common equity of 13.75 percent. The filing includes incremental
rates for the White Oak Mainline Expansion project, which benefits a single customer. Eastern Shore also proposed a revision to
its depreciation rates and negative salvage rate based on the results of independent, third-party depreciation and negative
salvage value studies. In March 2017, the FERC issued an order suspending the effectiveness of the
proposed tariff rates for the usual five-month period.
On August 1, 2017, Eastern Shore implemented new rates, subject to refund based upon the outcome
of the rate proceeding. Eastern Shore recorded incremental revenue of approximately $1.0
million for the three and nine months ended September 30, 2017, and established a regulatory
liability to reserve a portion of the total incremental revenues generated by the new rates until resolution of the rate
case. Settlement discussions continue with the other parties to the case.
Investing for Future Growth
To support and continue its growth, the Company has expanded, and will continue to expand, its resources and
capabilities. Eastern Shore has expanded, and has announced significant additional expansions to, its transmission system, and
is, therefore, increasing its staffing. The Company requested recovery of most of Eastern Shore's increased staffing costs in its
2017 rate case filing. Growth in non-regulated energy businesses, including Aspire Energy, PESCO and Eight Flags, requires
additional staff as well as corporate resources to support the increased level of business operations. Finally, to allow the
Company to continue to identify and move growth initiatives forward and to assist in developing additional initiatives, resources
have been added in the Company's corporate shared services departments. In the three and nine months ended September 30, 2017, the Company's staffing and associated costs increased by $617,000 and $4.7 million, or three percent and nine percent, respectively,
compared to the same periods in 2016. The Company is prudently managing the pace and magnitude of the investments being
made, while ensuring that it appropriately expands its human resources and systems capabilities to capitalize on future growth
opportunities.
Chesapeake Utilities Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except shares and per share data)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September 30,
|
|
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating Revenues
|
|
|
|
|
|
|
|
Regulated Energy
|
$
|
69,703
|
|
|
$
|
70,019
|
|
|
$
|
238,353
|
|
|
$
|
226,630
|
|
Unregulated Energy and other
|
57,233
|
|
|
38,329
|
|
|
198,827
|
|
|
130,356
|
|
Total Operating Revenues
|
126,936
|
|
|
108,348
|
|
|
437,180
|
|
|
356,986
|
|
Operating Expenses
|
|
|
|
|
|
|
|
Regulated Energy cost of sales
|
22,794
|
|
|
24,644
|
|
|
87,206
|
|
|
81,184
|
|
Unregulated Energy and other cost of sales
|
44,066
|
|
|
28,183
|
|
|
145,325
|
|
|
85,142
|
|
Operations
|
29,667
|
|
|
30,126
|
|
|
92,990
|
|
|
85,370
|
|
Maintenance
|
2,737
|
|
|
3,542
|
|
|
9,370
|
|
|
8,925
|
|
Gain from a settlement
|
—
|
|
|
—
|
|
|
(130)
|
|
|
(130)
|
|
Depreciation and amortization
|
9,362
|
|
|
8,209
|
|
|
27,267
|
|
|
23,493
|
|
Other taxes
|
4,071
|
|
|
3,488
|
|
|
12,572
|
|
|
10,725
|
|
Total operating expenses
|
112,697
|
|
|
98,192
|
|
|
374,600
|
|
|
294,709
|
|
Operating Income
|
14,239
|
|
|
10,156
|
|
|
62,580
|
|
|
62,277
|
|
Other income (expense), net
|
239
|
|
|
(28)
|
|
|
(643)
|
|
|
(68)
|
|
Interest charges
|
3,321
|
|
|
2,722
|
|
|
9,133
|
|
|
7,996
|
|
Income Before Income Taxes
|
11,157
|
|
|
7,406
|
|
|
52,804
|
|
|
54,213
|
|
Income taxes
|
4,324
|
|
|
2,990
|
|
|
20,781
|
|
|
21,401
|
|
Net Income
|
$
|
6,833
|
|
|
$
|
4,416
|
|
|
$
|
32,023
|
|
|
$
|
32,812
|
|
Weighted Average Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
16,344,442
|
|
|
15,372,413
|
|
|
16,334,210
|
|
|
15,324,932
|
|
Diluted
|
16,389,635
|
|
|
15,412,783
|
|
|
16,378,633
|
|
|
15,365,955
|
|
Earnings Per Share of Common Stock:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
1.96
|
|
|
$
|
2.14
|
|
Diluted
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
1.96
|
|
|
$
|
2.14
|
|
Chesapeake Utilities Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
|
Assets
|
|
September 30, 2017
|
|
December 31, 2016
|
(in thousands, except shares and per share data)
|
|
|
|
|
Property, Plant and Equipment
|
|
|
|
|
Regulated Energy
|
|
$
|
1,050,332
|
|
|
$
|
957,681
|
|
Unregulated Energy
|
|
207,331
|
|
|
196,800
|
|
Other businesses and eliminations
|
|
26,061
|
|
|
21,114
|
|
Total property, plant and equipment
|
|
1,283,724
|
|
|
1,175,595
|
|
Less: Accumulated depreciation and amortization
|
|
(267,138)
|
|
|
(245,207)
|
|
Plus: Construction work in progress
|
|
69,053
|
|
|
56,276
|
|
Net property, plant and equipment
|
|
1,085,639
|
|
|
986,664
|
|
Current Assets
|
|
|
|
|
Cash and cash equivalents
|
|
3,386
|
|
|
4,178
|
|
Accounts receivable (less allowance for uncollectible accounts of $912 and
$909, respectively)
|
|
52,775
|
|
|
62,803
|
|
Accrued revenue
|
|
14,307
|
|
|
16,986
|
|
Propane inventory, at average cost
|
|
5,226
|
|
|
6,457
|
|
Other inventory, at average cost
|
|
12,711
|
|
|
4,576
|
|
Regulatory assets
|
|
9,761
|
|
|
7,694
|
|
Storage gas prepayments
|
|
6,876
|
|
|
5,484
|
|
Income taxes receivable
|
|
26,741
|
|
|
22,888
|
|
Prepaid expenses
|
|
10,899
|
|
|
6,792
|
|
Mark-to-market energy assets
|
|
1,526
|
|
|
823
|
|
Other current assets
|
|
4,797
|
|
|
2,470
|
|
Total current assets
|
|
149,005
|
|
|
141,151
|
|
Deferred Charges and Other Assets
|
|
|
|
|
Goodwill
|
|
21,944
|
|
|
15,070
|
|
Other intangible assets, net
|
|
4,608
|
|
|
1,843
|
|
Investments, at fair value
|
|
6,380
|
|
|
4,902
|
|
Regulatory assets
|
|
75,793
|
|
|
76,803
|
|
Receivables and other deferred charges
|
|
3,381
|
|
|
2,786
|
|
Total deferred charges and other assets
|
|
112,106
|
|
|
101,404
|
|
Total Assets
|
|
$
|
1,346,750
|
|
|
$
|
1,229,219
|
|
Chesapeake Utilities Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
|
Capitalization and Liabilities
|
|
September 30, 2017
|
|
December 31, 2016
|
(in thousands, except shares and per share data)
|
|
|
|
|
Capitalization
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Preferred stock, par value $0.01 per share (authorized 2,000,000 shares),
no
shares issued and outstanding
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, par value $0.4867 per share (authorized 25,000,000
shares)
|
|
7,955
|
|
|
7,935
|
|
Additional paid-in capital
|
|
252,722
|
|
|
250,967
|
|
Retained earnings
|
|
208,402
|
|
|
192,062
|
|
Accumulated other comprehensive loss
|
|
(5,259)
|
|
|
(4,878)
|
|
Deferred compensation obligation
|
|
3,366
|
|
|
2,416
|
|
Treasury stock
|
|
(3,366)
|
|
|
(2,416)
|
|
Total stockholders' equity
|
|
463,820
|
|
|
446,086
|
|
Long-term debt, net of current maturities
|
|
201,248
|
|
|
136,954
|
|
Total capitalization
|
|
665,068
|
|
|
583,040
|
|
Current Liabilities
|
|
|
|
|
Current portion of long-term debt
|
|
12,136
|
|
|
12,099
|
|
Short-term borrowing
|
|
203,098
|
|
|
209,871
|
|
Accounts payable
|
|
53,284
|
|
|
56,935
|
|
Customer deposits and refunds
|
|
32,493
|
|
|
29,238
|
|
Accrued interest
|
|
3,361
|
|
|
1,312
|
|
Dividends payable
|
|
5,312
|
|
|
4,973
|
|
Accrued compensation
|
|
8,544
|
|
|
10,496
|
|
Regulatory liabilities
|
|
5,338
|
|
|
1,291
|
|
Mark-to-market energy liabilities
|
|
1,732
|
|
|
773
|
|
Other accrued liabilities
|
|
13,972
|
|
|
7,063
|
|
Total current liabilities
|
|
339,270
|
|
|
334,051
|
|
Deferred Credits and Other Liabilities
|
|
|
|
|
Deferred income taxes
|
|
252,273
|
|
|
222,894
|
|
Regulatory liabilities
|
|
42,915
|
|
|
43,064
|
|
Environmental liabilities
|
|
8,382
|
|
|
8,592
|
|
Other pension and benefit costs
|
|
32,059
|
|
|
32,828
|
|
Deferred investment tax credits and other liabilities
|
|
6,783
|
|
|
4,750
|
|
Total deferred credits and other liabilities
|
|
342,412
|
|
|
312,128
|
|
Total Capitalization and Liabilities
|
|
$
|
1,346,750
|
|
|
$
|
1,229,219
|
|
Chesapeake Utilities Corporation and Subsidiaries
Distribution Utility Statistical Data (Unaudited)
|
|
|
|
For the Three Months Ended September 30, 2017
|
|
For the Three Months Ended September 30, 2016
|
|
|
Delmarva NG Distribution
|
|
Chesapeake
Utilities Florida
NG Division
|
|
FPU NG Distribution
|
|
FPU Electric Distribution
|
|
Delmarva NG Distribution
|
|
Chesapeake
Utilities Florida
NG Division
|
|
FPU NG Distribution
|
|
FPU Electric Distribution
|
Operating Revenues
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
$
|
5,705
|
|
|
$
|
1,247
|
|
|
$
|
6,544
|
|
|
$
|
14,112
|
|
|
$
|
5,327
|
|
|
$
|
1,139
|
|
|
$
|
5,016
|
|
|
$
|
15,186
|
|
Commercial
|
|
5,888
|
|
|
1,344
|
|
|
6,070
|
|
|
11,701
|
|
|
5,136
|
|
|
1,201
|
|
|
5,752
|
|
|
11,991
|
|
Industrial
|
|
1,700
|
|
|
1,524
|
|
|
5,025
|
|
|
748
|
|
|
1,695
|
|
|
1,581
|
|
|
4,825
|
|
|
676
|
|
Other (1)
|
|
92
|
|
|
954
|
|
|
(854)
|
|
|
(2,481)
|
|
|
(76)
|
|
|
908
|
|
|
797
|
|
|
(1,805)
|
|
Total Operating Revenues
|
|
$
|
13,385
|
|
|
$
|
5,069
|
|
|
$
|
16,785
|
|
|
$
|
24,080
|
|
|
$
|
12,082
|
|
|
$
|
4,829
|
|
|
$
|
16,390
|
|
|
$
|
26,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (in Dts/MWHs)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
184,993
|
|
|
53,228
|
|
|
247,118
|
|
|
93,889
|
|
|
176,886
|
|
|
47,274
|
|
|
196,831
|
|
|
99,896
|
|
Commercial
|
|
449,543
|
|
|
1,172,625
|
|
|
366,318
|
|
|
88,917
|
|
|
469,921
|
|
|
1,313,963
|
|
|
409,155
|
|
|
90,013
|
|
Industrial
|
|
1,169,465
|
|
|
2,393,709
|
|
|
1,082,701
|
|
|
4,340
|
|
|
1,135,077
|
|
|
2,313,776
|
|
|
1,029,165
|
|
|
5,890
|
|
Other
|
|
35,519
|
|
|
—
|
|
|
(46,834)
|
|
|
1,880
|
|
|
28,208
|
|
|
—
|
|
|
601
|
|
|
1,979
|
|
Total
|
|
1,839,520
|
|
|
3,619,562
|
|
|
1,649,303
|
|
|
189,026
|
|
|
1,810,092
|
|
|
3,675,013
|
|
|
1,635,752
|
|
|
197,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
68,118
|
|
|
15,782
|
|
|
54,543
|
|
|
24,628
|
|
|
65,663
|
|
|
15,337
|
|
|
53,314
|
|
|
24,367
|
|
Commercial
|
|
6,782
|
|
|
1,425
|
|
|
4,007
|
|
|
7,455
|
|
|
6,695
|
|
|
1,408
|
|
|
4,216
|
|
|
7,401
|
|
Industrial
|
|
145
|
|
|
78
|
|
|
2,132
|
|
|
2
|
|
|
125
|
|
|
74
|
|
|
1,814
|
|
|
2
|
|
Other
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
75,048
|
|
|
17,285
|
|
|
60,682
|
|
|
32,085
|
|
|
72,489
|
|
|
16,819
|
|
|
59,344
|
|
|
31,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chesapeake Utilities Corporation and Subsidiaries
Distribution Utility Statistical Data (Unaudited)
|
|
|
For the Nine Months Ended September 30, 2017
|
|
For the Nine Months Ended September 30, 2016
|
|
|
Delmarva NG Distribution
|
|
Chesapeake
Utilities Florida
NG Division
|
|
FPU NG Distribution
|
|
FPU Electric Distribution
|
|
Delmarva NG Distribution
|
|
Chesapeake
Utilities Florida
NG Division
|
|
FPU NG Distribution
|
|
FPU Electric Distribution
|
Operating Revenues
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
$
|
42,511
|
|
|
$
|
4,165
|
|
|
$
|
24,945
|
|
|
$
|
33,915
|
|
|
$
|
37,074
|
|
|
$
|
3,977
|
|
|
$
|
20,597
|
|
|
$
|
36,911
|
|
Commercial
|
|
23,724
|
|
|
4,262
|
|
|
23,114
|
|
|
31,190
|
|
|
20,576
|
|
|
3,847
|
|
|
20,912
|
|
|
31,814
|
|
Industrial
|
|
5,383
|
|
|
4,860
|
|
|
15,727
|
|
|
1,952
|
|
|
5,274
|
|
|
4,808
|
|
|
15,399
|
|
|
2,154
|
|
Other (1)
|
|
(1,586)
|
|
|
2,819
|
|
|
(4,909)
|
|
|
(4,277)
|
|
|
(1,164)
|
|
|
2,665
|
|
|
(2,615)
|
|
|
(5,410)
|
|
Total Operating
Revenues
|
|
$
|
70,032
|
|
|
$
|
16,106
|
|
|
$
|
58,877
|
|
|
$
|
62,780
|
|
|
$
|
61,760
|
|
|
$
|
15,297
|
|
|
$
|
54,293
|
|
|
$
|
65,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (in Dts/MWHs)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
2,576,001
|
|
|
253,888
|
|
|
1,022,598
|
|
|
224,513
|
|
|
2,495,103
|
|
|
260,404
|
|
|
993,917
|
|
|
241,691
|
|
Commercial
|
|
2,445,262
|
|
|
3,991,244
|
|
|
1,426,875
|
|
|
229,545
|
|
|
2,539,404
|
|
|
4,118,131
|
|
|
1,633,920
|
|
|
233,199
|
|
Industrial
|
|
3,749,961
|
|
|
8,519,221
|
|
|
3,372,394
|
|
|
12,250
|
|
|
3,680,383
|
|
|
8,405,424
|
|
|
3,188,556
|
|
|
17,470
|
|
Other
|
|
66,273
|
|
|
—
|
|
|
(62,710)
|
|
|
5,627
|
|
|
68,293
|
|
|
—
|
|
|
(4,723)
|
|
|
6,577
|
|
Total
|
|
8,837,497
|
|
|
12,764,353
|
|
|
5,759,157
|
|
|
471,935
|
|
|
8,783,183
|
|
|
12,783,959
|
|
|
5,811,670
|
|
|
498,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
68,419
|
|
|
15,739
|
|
|
54,312
|
|
|
24,549
|
|
|
65,943
|
|
|
15,303
|
|
|
53,215
|
|
|
24,268
|
|
Commercial
|
|
6,843
|
|
|
1,417
|
|
|
4,084
|
|
|
7,443
|
|
|
6,745
|
|
|
1,391
|
|
|
4,247
|
|
|
7,399
|
|
Industrial
|
|
145
|
|
|
78
|
|
|
2,042
|
|
|
2
|
|
|
123
|
|
|
72
|
|
|
1,760
|
|
|
2
|
|
Other
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
75,413
|
|
|
17,234
|
|
|
60,438
|
|
|
31,994
|
|
|
72,816
|
|
|
16,766
|
|
|
59,222
|
|
|
31,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Operating Revenues
from "Other" sources include unbilled revenue, under (over) recoveries of fuel cost, conservation revenue, other
miscellaneous charges,
fees for billing services provided to third parties and adjustments for pass-through taxes.
|
View original content:http://www.prnewswire.com/news-releases/chesapeake-utilities-corporation-reports-third-quarter-results-300552517.html
SOURCE Chesapeake Utilities Corporation